(A) A corporation which qualifies as a Domestic International Sales Corporation (DISC) under the provisions of the Federal Internal Revenue Code (Subchapter N, of Chapter 1), and which has in effect for the entire taxable year a valid election under federal law to be treated as a DISC.

(B) If a corporation makes an election as provided in paragraph (a), then each person who at any time is a shareholder of such a corporation shall be subject to taxation under Chapter II or Chapter 19 on the earnings and profits or taxable income of the DISC in the same manner as provided by federal law for all periods for which the election is effective."

Section 2. This Act shall take effect with respect to all ,taxable years beginning after December 31, 1971.